June 27 — Stash those headphones and trash that file-swapping software: Companies are cracking down on employees who use streaming media and swap MP3s at work.

COMPANIES INCREASINGLY ARE blocking access to Internet music and video at firewalls and are issuing sweeping initiatives that ban workplace media usage. The trend is a result of two developments: media usage hogging enormous amounts of corporate bandwidth and threats of legal liability as the entertainment industry aggressively pursues copyright scofflaws.

The Recording Industry Association of America is beginning to train its legal guns on companies it thinks are aiding copyright theft by allowing workers to trade free music and movies at work.

In April, the RIAA announced a settlement with an Arizona company that allegedly let employees trade MP3 files over an internal network. Integrated Information Systems (IIS) agreed to settle the case for $1 million. And more companies will be facing similar charges, according to RIAA President Cary Sherman.

“We’d very much like corporations to think about their obligations to respect the intellectual property rights of our artists and labels,” he said. “Some of these corporations, we are told, have their own little networks — that is very clearly illegal.”

Typically, the RIAA receives tips about alleged illegal file swapping through its anonymous tip line. It then threatens legal action and asks companies to stop. So far, the tactics may be working.

The IIS incident, along with the RIAA’s punishment of file-swapping networks such as Napster and Kazaa, has prompted companies to examine their own usage policies to make sure they’re not running afoul of copyright law.

“I think that got people’s attention,” Ross Blanchard, director of marketing at online song database Gracenote, said of the IIS settlement.

NETWORK HOGS

Then there’s the bandwidth strain.

Companies are slowly realizing that their sluggish networks may not be the result of a flurry of e-commerce transactions or an influx of training videos. Instead, employees may be slowing the system simply to get their hands on a copy of the latest “Star Wars” movie.

“There’s just so much broader use of networks than what they were intended for,” said Wilson Craig, the public relations manager for Packeteer, which makes products to manage network traffic.

Craig said companies will come in with complaints about sluggish networks, thinking newly installed corporate software is to blame, only to discover that 40 percent of their bandwidth is being taken up by music downloads.

People are more likely to use their work computers than home computers to swap media files or listen to streaming audio or video, according to research firm Nielsen/NetRatings. That’s probably because their office computers are connected to higher-speed networks than their home machines. Some studies have estimated that as many as one in five work computers contains file-swapping software.

Even companies in the business of protecting corporate networks from abuse and strain aren’t immune from the problem. NetReality, which makes network management software, saw its system grind to a halt one day. The cause: Someone in the Israeli office was downloading a copy of “The Lion King.”

It’s not an unusual discovery, as more media become available to wreak havoc on corporate networks, surprising companies large and small with their popularity. The availability of swapping sites and digital music and movies has never been greater, despite Hollywood’s attempts to restrict them.

The number of “peer-to-peer” Web sites has increased fivefold in the past year, according to Websense, a company that makes software to monitor and block employee Web usage. What’s more, Websense says, the number of sites containing streaming media, such as online movie theaters, has jumped fourfold in the past year to 400,000 Web pages.

“I DON’T WANT TO WAIT”

Companies can use several tactics to stem the flow of unwanted media files on their networks, including blocking access or simply telling employees there’s a ban. But determined workers and developers, it seems, are finding ways around such obstacles. For example, some file-swapping technology can trick a network into allowing it in by disguising itself as a mundane piece of software.

And as Napster and its underground offshoots have shown, people will find ways to collect movies and music.

An employee of Entertainment Weekly who asked not to be identified said he regularly obtains music from file-swapping sites, despite a ban on the practice by his employer, AOL Time Warner. The media giant owns one of the major record labels that’s successfully cracked down on such sites.

Although the company doesn’t have an internal network and prohibits use of major file-swapping sites, the employee said AOL Time Warner has yet to block some smaller, more obscure sites where he can find music.

“If I like a song and I want to hear it, I don’t want to wait for the next hour or more to hear it on the radio,” the employee said, adding that he doesn’t fear he’ll be punished for securing tunes, as long as he gets his work done.

“I get the impression they just turn the other way,” said the employee, who estimated that he buys about three CDs a month in addition to obtaining music via the Web.

Others haven’t been so lucky. Carla Tomino, a secretary at Northwestern University, said she was fired last summer for violating a policy prohibiting personal use of company equipment by storing 2,000 MP3 files on her computer.

Although firing may be an extreme case, Tomino is not alone in being punished. According to Websense, about 35 out of 250 companies surveyed in a recent poll had disciplined or reprimanded employees for downloading songs.

But technological tricks or stringent corporate policies aren’t likely to stop the practice. As the Entertainment Weekly employee said, “If you want it bad enough, you can find it.”

JUST LIVE WITH IT

IT workers say the same thing—that the songs are already out of the proverbial jewel box. Like universities, companies may have to learn to live with a certain amount of media on their networks.

Frank Gillman, director of technology for the law firm Allen Matkins Leck Gamble & Mallory, said streaming media and MP3s are only the latest ways for employees to waste time and corporate resources.

“Every month brings something new that people will do,” he said. “Today’s MP3 is just yesterday’s Internet surfing, which was yesterday’s sending e-mail to relatives, which was yesterday’s putting the book under the table and reading.”

Gillman said his company tries to block media files with Websense, but he knows some of them still get through. Gillman said one of the most effective deterrents is educating people and making it personal—telling employees, for example, that even something as seemingly benign as downloading a movie can cause major network problems for their buddy or work group in the next cubicle.

“What you really want to do is protect people from themselves,” he said.

I think owners of business should be allowed to regulate what goes own in their companies. The employees work their. Its a job, not leisure time. The employees don't own the company so they don't have that much influence.